Intel Core Inside - CPU smuggler caught with over $120,000 worth of Intel CPUs

[Spotty]

Summary

In a bizarre twist on the ongoing silicon shortage, Hong Kong customs have thwarted attempts to smuggle Intel CPUs with customs officers discovering over 250 10th gen Intel CPUs concealed on the body of a truck driver. The CPUs were secured with plastic cling wrap around his legs and torso.

 

(Photos: https://www.hkepc.com/20477/價值_80_萬256_粒_1070010900K_綁上身_共檢獲_308_粒_Intel_CPU兩跨境司機走私被捕)

 

Quotes

Quote

As reported by HKEPC, the Hong Kong-Zhuhai-Macao Bridge Customs department has reported that it managed to stop two recent smuggling attempts involving Intel's 10th-gen Comet Lake processors that totaled more than $123,000 worth of chips.

These aren't isolated events, though. On July 5, Hong Kong Customs also seized as much as 2,200 CPUs, over 1,000 RAM sticks, around 630 smartphones, and, oddly enough, 70 cosmetics products. The total market value of this smuggling attempt is 4 million USD.

... After inspection, the officer found 256 CPUs strapped to the driver’s upper ribs and calves. The CPUs in question were Intel Core i7-10700 and Core i9-10900K CPUs valued at about 800,000 Chinese Yuan (~$123,281 USD).

 

My thoughts

Makes sense they're smuggling Intel CPUs and not AMD Ryzen CPUs. Having hundreds of PGA CPUs strapped to your body would suck.

I'm just baffled by this. I actually saw this pop up on another news website and I assumed it was satire making light of the current silicon shortage until I checked and saw other news outlets reporting on it. Are CPUs in such short supply there? Why smuggle them? Is it just to avoid the import taxes/duty or is there more to it?

 

 

Sources

https://www.tomshardware.com/news/chip-shortage-leads-to-dollar123000-cpu-smuggling-bust-in-hong-kong

[Arika]

9 minutes ago, Spotty said:

Makes sense they're smuggling Intel CPUs and not AMD Ryzen CPUs. Having hundreds of PGA CPUs strapped to your body would suck

thats not even something i thoughts about....ow

 

 

also why. where were they being smuggled to/from? and why "smuggle" them in the first place? Since when was it illegal to bulk buy CPUs? strapping them to your body just adds suspicion when there probably didn't need to be.

[Taf the Ghost]

2 minutes ago, Arika S said:

thats not even something i thoughts about....ow

 

 

also why. where were they being smuggled to/from? and why "smuggle" them in the first place? Since when was it illegal to bulk buy CPUs? strapping them to your body just adds suspicion when there probably didn't need to be.

Well, they aren't boxed, so they'd only be sold on the secondary market. I would assume they're stolen goods more than they're really smuggling CPUs. Though, frankly, using some Xeons or Epycs as a way to move large amounts of money as a proxy isn't a bad idea. The Value per Volume of top end server CPUs is really high.

[LAwLz]

4 minutes ago, Arika S said:

also why. where were they being smuggled to/from? and why "smuggle" them in the first place? Since when was it illegal to bulk buy CPUs? strapping them to your body just adds suspicion when there probably didn't need to be.

My guess is that these CPUs were stolen, and not bought in bulk.

If you're stopped at an inspection point with over 100,000 dollars worth of CPUs they might ask where you got them from and some proof.

[Spotty]

17 hours ago, Arika S said:

also why. where were they being smuggled to/from?

I believe it was caught at the customs between China and Hong Kong, not sure which direction, I assume in to Hong Kong since it was Hong Kong customs that found it.

 

16 hours ago, Taf the Ghost said:

Well, they aren't boxed, so they'd only be sold on the secondary market. I would assume they're stolen goods more than they're really smuggling CPUs. Though, frankly, using some Xeons or Epycs as a way to move large amounts of money as a proxy isn't a bad idea. The Value per Volume of top end server CPUs is really high.

That would make sense. The CPUs were high value ones such as the 10900k, which is going for around $800 USD on newegg currently. As for Xeons/Epyc CPUs, it probably comes down to either the 10th gen i7 and i9 being what they were able to get their hands on or possibly easier to sell the consumer CPUs with more demand for them on trading sites and such. Could just be that they are also smuggling Xeons/Epycs/Ryzen/Threadripper but it was just the Intel ones that were caught recently.

 

Another possibility is they're counterfeit/scam CPUs destined to be sold as part of a larger scam operation. Could be old pentium CPUs with 10900k heatspreaders or markings on them. I doubt customs would have put them in a system to actually test and confirm they're 10900k's.

There is a close up photo of the CPU, someone could probably recognise if it's LGA1200 or not. Click to enlarge.

Edited July 9, 2021 by Spotty

[Taf the Ghost]

@Spottycould be a mix of all of it. Combination of real and fake, as that would increase volume for sale without really having the product.

[RejZoR]

1 hour ago, Arika S said:

thats not even something i thoughts about....ow

 

 

also why. where were they being smuggled to/from? and why "smuggle" them in the first place? Since when was it illegal to bulk buy CPUs? strapping them to your body just adds suspicion when there probably didn't need to be.

Tax most likely. Imagine if you get bunch of CPU's with cash (that might be dirty money in the first place) and sell it without having to pay income/sales tax to anyone. It's pure profit and how this stuff is currently hot, it would be 100% profit for this person. Once you start paying tax and stuff your profit quickly goes down and people might not bother with it legal way.

[Kadzo]

They stopped me on that border 3 times and did a full body scan with complete scans of my luggage, so they don`t mess around (but that is expected for a foreigner in China) . 

Also that part is famous for transitions of high valued items, in Macao there is gambling and medications, and in Hon kong there is more "freedom"  so probably they are trying to avoid some tariffs of customs.

[WereCat]

@LinusTech

 

 

Hmmm... Linus pointed out the IHS was damaged and had very weird defects. It's possible these are sourced from smuggling?

[StDragon]

Smuggling CPUs? This story doesn't compute.

[Kisai]

10 hours ago, Spotty said:

Why smuggle them? Is it just to avoid the import taxes/duty or is there more to it?

 

A) Taxes

B) Counterfeit/remarked

 

When I worked for the auction site, everything that came from China was to be treated as suspected counterfeit if the price wasn't close to retail. At least for branded products.

 

Now it is hard to "counterfeit" stuff like this, but if they remarked a CPU, they likely could have also tampered with the microcode so a BIOS would say it's a chip it isn't.

 

[DedoGamingONE]

11 hours ago, Spotty said:

I believe it was caught at the customs between China and Hong Kong, not sure which direction, I assume in to Hong Kong since it was Hong Kong customs that found it.

 

That would make sense. The CPUs were high value ones such as the 10900k, which is going for around $800 USD on newegg currently. As for Xeons/Epyc CPUs, it probably comes down to either the 10th gen i7 and i9 being what they were able to get their hands on or possibly easier to sell the consumer CPUs with more demand for them on trading sites and such. Could just be that they are also smuggling Xeons/Epycs/Ryzen/Threadripper but it was just the Intel ones that were caught recently.

 

Another possibility is they're counterfeit/scam CPUs destined to be sold as part of a larger scam operation. Could be old pentium CPUs with 10900k heatspreaders or markings on them. I doubt customs would have put them in a system to actually test and confirm they're 10900k's.

There is a close up photo of the CPU, someone could probably recognise if it's LGA1200 or not. Click to enlarge.

hmm yes 800 USD

[StDragon]

51 minutes ago, Kisai said:

A) Taxes

B) Counterfeit/remarked

 

When I worked for the auction site, everything that came from China was to be treated as suspected counterfeit if the price wasn't close to retail. At least for branded products.

 

Now it is hard to "counterfeit" stuff like this, but if they remarked a CPU, they likely could have also tampered with the microcode so a BIOS would say it's a chip it isn't.

 

Microcode wasn't introduced until the Pentium Pro and subsequently on all derivatives (Pentium II, Pentium III, etc) from that. Which BTW made the lack of it easier to counterfeit binned Pentium CPUs back in the day.

 

Peter over at CPU Galaxy posted a video on counterfeit Pentium CPUs where they were just painted over. Back then, you clocked them via jumpers on the MB. In effect, you would overlocking the CPU without knowing it.

 

There's also a second video of his where a mobile CPU was repackaged into a desktop fake as well.

 

[Spotty]

5 hours ago, DedoGamingONE said:

hmm yes 800 USD

It was $780 when I posted that, but it was also in stock. Maybe it was in stock at a third party reseller when I checked. 

[Icarus_Radio]

Well, I do not know if you can do this on amazon or newegg. However, in China, you do have an option to buy a CPU without a box. You can get around 20-30% off compared with a box one. (e.g. box i3-10100 cost ~1000 CNY while boxless cost ~600 CNY last year)

A large amount of the supply of these boxless CPUs are just from smuggling.

[atxcyclist]

18 hours ago, StDragon said:

Smuggling CPUs? This story doesn't compute.

Hopefully they cache the people responsible.

[SpikeSpiegel]

Why not smuggle some 3090's instead Intel CPUs and you really can't strap more than 4 per leg....kekeke.